BBB is likely to be a six-member board comprising former CMDs of banks and financial services sector experts. It will be headed by Secretary, Department of Financial Services.
There are 22 state-owned banks in India including SBI, IDBI Bank and Bhartiya Mahila Bank.
"The Bureau should be hopefully in place in the next 3-4 months after it is cleared by Appointments Committee of the Cabinet (ACC) headed by Prime Minister Narendra Modi," Department of Financial Services Secretary Hasmukh Adhia told PTI in an interview.
It would also be responsible for selection of non-executive
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chairman and non-official directors on the boards, he said.
Besides, BBB will also steer strategy discussion on consolidation based on the requirement, Adhia added.
Government wants to encourage Bank Boards to restructure their business strategy and also suggest way forward for their consolidation and merger with other banks if it is win-win for both, the Finance Ministry said in a statement recently.
Proposed BBB is part of overall strategy for restructuring of public sector banks and a step towards establishing a holding and investment company for lenders.
This issue was discussed extensively at the Gyan Sangam addressed by Modi in the first week of January.
During the two-day bankers' retreat, heads of financial institutions have suggested the creation of Bank Investment Committee (BIC) and transfer of the government's investment in banks to BIC.
Creation of BIC would over the time enable the government to reduce ownership to below 51 per cent and help banks generate capital for growth.
Public sector banks alone require Rs 2.40 lakh crore by 2018 to meet global Basel III norms.